Four actionable stock ideas from a legendary investor

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Today’s issue in preview:

• Four actionable stock ideas from a legendary investor

• A major earnings report shows our Power Grid theme is a juggernaut. Are you profiting?

• A major retailer soars to a new high. Are you heeding its message?

• Learn our Top Themes to buy now

Four actionable stock ideas from a legendary investor

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Over the past 12 months, the S&P Biotech ETF (XBI) is up 72%, GLP-1 drug giant Eli Lilly (LLY) is up 48%, and the world’s largest healthcare ETF, the Health Care Select Sector Fund (XLV), is up 23%.

In other words, our call to invest in Boomer health care and the related trend in biotechnology is paying off well.

Constant Money & Megatrends readers know the bull case here: The giant Baby Boomer demographic is entering the phase of life when healthcare spending skyrockets. For many boomers, a typical month involves going to see at least one doctor to have something looked at, removed, or treated. This means many healthcare businesses are experiencing huge demand now – and will for at least the next decade.

Now is a good time to look at how Stanley Druckenmiller is positioning himself to benefit from this megatrend.

Druckenmiller is one of the world’s greatest investors. He’s on my “Mt. Rushmore” of investors and traders. It’s been reported that “Druck” achieved 30% annual returns for 30 years without a single down year. That earns him his own wing in the Wall Street Hall of Fame.

In recent interviews, Druckenmiller has mentioned he’s bullish on health care and biotech… especially given how diagnostics, analytics, and treatment discoveries could be turbocharged by the pairing of AI and genomics. He employs specialized experts in the field to perform research and find stock ideas.

Large money managers like Druckenmiller must report their public-market positions to government regulators via “13F filings.” Those filings are made every quarter and are public. 13F filings essentially allow you to look over the shoulder of investors like Druckenmiller, which is often useful for spotting trends and good stock ideas. Reviewing their new buys is like having a world-class research team working for you for free.

With all this in mind, we researched Druckenmiller’s recent stock buys in the healthcare sector and found four stocks with compelling long-term outlooks:

Caris Life Sciences (CAI) is a $4.4 billion market cap oncology diagnostics company. It analyzes the molecular characteristics of patients’ tumors using DNA, RNA and protein information, helping physicians select treatments and clinical trials that will be appropriate for a particular cancer. Caris also uses its large clinical and molecular database to support pharmaceutical research and drug development. Its opportunity rests on expanding cancer testing, increasingly personalized treatments and the growing value of real-world oncology data.

Option Care Health (OPCH) is a $3.5 billion market cap provider of home and alternate-site infusion therapy. It delivers medications, nursing services and clinical support to patients receiving treatments for immune disorders, infections, cancer, and other complex conditions. Home infusion is generally less expensive and more convenient than hospital-based treatment. Option Care benefits from an aging population, growing use of specialty biologic drugs and pressure to move care into lower-cost settings.

Olema Pharmaceuticals (OLMA) is a $985 million firm developing treatments for hormone-receptor-positive breast cancer. Its lead drug, palazestrant, is an oral therapy designed to completely antagonize and degrade the estrogen receptor, including mutated forms that can cause resistance to existing treatments. Olema is studying the drug alone and in combinations with other cancer medicines.

Belite Bio (BLTE) is a $6.2 billion market-cap clinical-stage biotechnology company developing a treatment for retinal diseases associated with toxic vitamin-A byproducts. Its principal targets include Stargardt disease, a rare inherited condition that can cause progressive vision loss, and geographic atrophy related to dry age-related macular degeneration.

Druckenmiller believes the fundamentals detailed above are creating a significant opportunity in healthcare. He has the money to buy world-class research and perform in-depth analysis. The stock ideas above are the product of all this. In a health care bull market, it’s valuable information.

A major earnings report shows our Power Grid theme is a juggernaut. Are you profiting?

Credit: Gabriela Colosque

It’s official: Eaton’s (ETN) business is booming.

And that’s important for you and your portfolio.

Yesterday, the company reported earnings that beat Wall Street’s expectations. It also reported strong sales growth and an enormous backlog of future orders. After the news, Eaton’s stock jumped 5.5% to a new all-time high.

Why should you care about any of this?

Eaton is one of the largest companies that most people don’t know about.

With a market cap of $170 billion, over 95,000 employees, and annual revenue of $27.4 billion, Eaton is a giant of American manufacturing.

The company makes electrical transformers, circuit breakers, utility voltage regulators, switches, electrical panels, and other critical components of a functioning power grid. Its fastest-growing segment equips AI data centers with the electrical infrastructure they need to operate.

Money & Megatrends readers in good standing know the compelling “bull case” for stocks in the electrical infrastructure sector.

Given AI’s enormous promise, large tech firms like Google (GOOG), Microsoft (MSFT), and Amazon (AMZN) are investing trillions of dollars to build the best AI models and infrastructure. Much of this money is being spent on massive data centers.

All that AI infrastructure is poised to consume huge amounts of electricity. Goldman Sachs forecasts global data center power demand will climb 50% by 2027 and as much as 165% by the end of the decade.

This is creating a big investment opportunity.

The U.S. power grid is often called the world’s largest machine. It’s a giant network of power stations, transmission lines, substations, and underground wires. Most people barely know it’s there or how it works, but without this big machine, your lights don’t turn on, there’s no Netflix, and your iPhone doesn’t charge.

Industry experts say the power grid is aging and creaking under the strain of increased electricity demand. The American Society of Civil Engineers (ASCE) gave the energy sector a D+ in its 2025 Infrastructure Report Card, citing concerns about rising energy demand, aging infrastructure, and a lack of transmission capacity.

Soaring electricity demand… a grid badly in need of an upgrade… AI supremacy on the line… trillion of dollars of economic output on the line…

This is a recipe for a bull market in companies that build, repair, and upgrade our power grid. Investment plans for 51 investor-owned utilities total an estimated (and gigantic) $1.4 trillion over the next five years, according to PowerLines, an advocacy group. We are talking about large, relentless flows of money into this industry.

In our July 31 issue, we analyzed the long-term trend in the “Power Grid Upgrade” theme and reaffirmed our bullish stance. Eaton’s strong results reinforce our thinking.

Big tech is spending trillions of dollars on the AI infrastructure buildout. AI supremacy versus China is on the line. Plus, the Made in America megatrend we are bullish on will require huge amounts of reliable electric power.

Given the tremendous amount of money and geopolitical power at stake here, the Power Grid Upgrade theme is going to see huge money flows over the next five years. With this bullish backdrop in mind, I believe top Power Grid Upgrade stocks will be higher two years from now than where they are now.

A major retailer soars to a new high. Are you heeding its message?

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If you think the American consumer is struggling, think again.

Williams-Sonoma (WSM) just hit an all-time high.

The stock is up 25% over the past year.

Such a company doesn’t enjoy boom times when the American consumer is pulling back. And there’s insight for investors to take from this development.

Williams-Sonoma is one of America’s largest furniture, décor, and “all things kitchen” retailers. It operates through its popular Pottery Barn, West Elm, and Williams-Sonoma stores.

With a huge-for-a-specialty-retailer market cap of $29 billion and over 600 stores across the country, WSM is a pervasive presence in America’s shopping malls and homes.

Not in all homes, however.

WSM sofas, chairs, kitchenware, cabinets, and beds on are the pricier side of their markets. They aren’t on the super-high end, but they most certainly are not IKEA.

Most WSM offerings are considered “accessible premium.” The company targets mid to high-end consumers who can drop $10,000+ on a bedroom set or $1,000 on pots and pans.

This year, I’ve written over a dozen research notes detailing how many consumer spending stocks, such as WSM and Starbucks (SBUX), are signaling the American consumer is alive and well. This impressive market action is in stark contrast to mainstream media reports citing the popular but flawed Michigan Consumer Sentiment Survey and its dismal consumer sentiment readings.

I’ve been investing and reading financial research for 28 years. During all that time, I’ve heard many famous pessimists forecast the death of the American consumer. Well, not even the dot.com crash or the 2008 financial crisis could knock it out.

This is why I say that in the event of global thermonuclear war, two things will survive. Cockroaches and the American consumer.

As an investor, you can base your decisions on bearish stories written by journalists who don’t know a bull market from a flea market. You can base your decisions on forecasts issued by professional pessimists who predict nothing but doom and gloom.

Or, you can focus on reality. You can focus on what’s happening in the real world. Right now, reality says consumer stocks – led by the gigantic Williams-Sonoma – are in an uptrend and the consumer is doing just fine. Invest accordingly!

Market Notes

• Megabank JPMorgan Chase (JPM) reached a new all-time high today. This is a bullish economic signal.

• High-end cruise line operator Viking Holdings (VIK) reached a new all-time high today. This is a sign that consumer spending is strong.

• Power tools giant Stanley Black & Decker (SWK) reached a new one-year high today. This may signal that the brutal downturn in the housing market may be over.

• Retail giant Macy’s (M) reached a new one-year high today.

• Full-service restaurant giant The Cheesecake Factory (CAKE) reached a new all-time high today. This indicates strong consumer health.

• Consumer appliance giant SharkNinja (SN) reached a new all-time high today.

Regards,

Brian Hunt
Editor, Money & Megatrends

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